For too long, Florida employers and their workers’ compensation insurance carriers have been able to accuse employees of insurance fraud without consequence if proven wrong. No longer.

Until the recent decision in Carrillo v. Case Engineering Inc./Claims Center, (Fla. 1st DCA 2-11-2011), employers and their insurance carriers were free to assert the so-called “fraud defense” without regard for any negative consequences. Accordingly, with nothing to lose and much to gain, namely, claimants losing the right to all benefits, combined with an absurdly low standard of proof, carriers have used the defense indiscriminately for many years. In far too many cases, the calculation has been simply to throw the defense on the wall and hope that it sticks. If nothing else, it was a way of leveraging injured workers to settle their cases for less than full value.

Carrillo has changed the no risk element of the defense.

One of the few ways in which injured workers (claimants) can be awarded attorneys fees against employers and their insurance carriers, a valuable benefit, is if “a carrier or employer denies that an accident occurred… and the claimant prevails on the issue of compensability.” Florida Statute section 440.34(3)(c).
In Carrillo, the carrier, Claims Center, raised the “fraud” defense, seeking to disqualify the claimant from any benefits whatsoever in the future. The defense was defeated at the trial level. Nevertheless, the trial judge refused to award the claimant attorney’s fees. On appeal, the District Court of Appeal reversed the trial judge, correctly noting that when Claims Center raised the “fraud” defense based on sections 440.09 and 440.105, it placed coverage of the accident and resulting injuries – and thus compensability – at issue. Accordingly, the claimant was awarded carrier-paid attorney’s fees and costs.

Insurance fraud is a serious offense and should be dealt with harshly. However, the charge should never be leveled without high regard for the gravity and effect that it can have on the person accused. The Carrillo decision should limit dramatically the unwarranted use of this defense.

Notice to insurance carriers: Play, you pay.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.